Government drops plan to cap charitable donations

  • 31 May 2012

The Art Fund is thrilled by the government's announcement that it will drop its plan to introduce a cap on tax relief on donations to charity " a proposal which our Director Stephen Deuchar said would have a 'devastating impact' on planned fundraising appeals.

 The Procession to Calvary by Brueghel the Younger, saved in 2011 thanks to charitable donations

The Procession to Calvary by Brueghel the Younger, saved in 2011 thanks to charitable donations

Chancellor of Exchequer George Osborne said today, "I can confirm that we will proceed next year with a cap on income tax reliefs for wealthy people, but we won't be capping relief for giving money to charity. It is clear from our conversations with charities that any kind of cap could damage donations, and as I said at the Budget that's not what we want at all. So we've listened.” The welcomed U-turn comes after the Art Fund joined over 1,000 other charities in signing up to the Give it Back, George campaign which called on the government to abandon its bid to cap relief on charitable donations over £50,000 or 25% of income. This would have deterred the most generous givers, and have had a disproportionate impact on the arts, museums and cultural charities, which are often dependent on a small pool of larger-value donors.

Director Stephen Deuchar welcomed the news, ‘We are pleased that the government has listened at last. The plan to cap relief on charitable donations would have had a detrimental impact on all charities and their causes. In the arts, it would have put at risk building projects, endowment appeals and the quality of public collections which attract millions of visitors each year. The challenge now - and it is considerable - is to rebuild the trust of donors and to get philanthropic giving back on track’.

The Chancellor had been concerned that individuals would be able to use the available reliefs to avoid having to pay tax and the HMRC will now work with charity sector to make sure tax relief for charities aren't used by the small minority who use them for avoidance reasons.

Tags: what-we-do